$74m for Kalium Lakes’ Pilbara potash project

WA potash company Kalium Lakes has been handed a $74 million boost by the Federal Government, with the Northern Australia Infrastructure Facility agreeing to kick in a loan to back its Pilbara sulphate of potash project.

Federal Resources Minister Matt Canavan announced the NAIF loan today, saying backing the WA company’s plant would not only create mining jobs but help deliver a critical fertiliser to Australian farmers.

“This NAIF investment will help unlock an Australia-first. For the first time Australia will have a domestic source of sulphur of potash, a crucial fertiliser that Australia has until now had to import,” he said.

“This project itself will directly create more than 150 jobs but it will help support many thousands more in our farming industry right across Australia. This project demonstrates how developing Northern Australia benefits the whole of Australia.”

The Brett Hazelden-led company released its bankable feasibility study on its Beyondie project last year, putting a $159 million price tag on stage one of the project, aiming to produce 82,000 tonnes a year from 2020. Another $125 million would be needed to lift the annual rate of production to 164,000 tonnes.

The NAIF injection – which is still subject to some conditions – should cover the bulk of Kalium’s planned debt raising, with the company previously having said it plans a 60/40 debt to equity mix for its capital costs.

Kalium Lakes has previous said it had pencilled in an offtake agreement with German chemicals giant K+S covering 100 per cent of product from Beyondie for the first 10 years of production.

Beyondie, 160km south-east of Newman, will extract brine from sub-surface deposits, before salts are extracted through evaporation ponds and processed.

The NAIF loan will help cover a new gas pipeline to the project, a power plant and 75km worth of sealed roads.

The company said on Monday it had received its mining licences for the project, after reaching land access agreements with native title holders.

Kalium Lakes shares were up 2¢, or 5.1 per cent, to 41¢ in early trade.